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Roche to conclude Spark deal; GSK drug OK vs. blood cancer; Lilly's 2020 outlook

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Roche to conclude Spark deal; GSK drug OK vs. blood cancer; Lilly's 2020 outlook

Top news

* Roche Holding AG accepted for payment all shares in the tender offer to acquire Spark Therapeutics Inc. in a $4.3 billion all-cash deal. Citibank NA, the depositary for the tender offer, advised the Swiss pharmaceutical company that about 23,276,342 of Spark's common shares were validly tendered and not validly withdrawn, representing about 60.4% of the latter's outstanding common stock.

The transaction has received all required antitrust approvals after the U.S. Federal Trade Commission granted the deal unconditional clearance and termination of the waiting period under the Hart-Scott-Rodino Act.

* GlaxoSmithKline PLC said patients with advanced multiple myeloma had a 31% overall response rate when treated with its experimental anti-BCMA agent belantamab mafodotin, or GSK2857916, offering a potential new treatment option should U.S. regulators give it the go-ahead. The therapy was given to patients in the Dreamm-2 trial who had received an average of seven previous lines of treatment that had failed, in doses of either 2.5 milligrams or 3.4 milligrams per kilogram, every three weeks.

* Eli Lilly and Co. is expecting higher operating margin and earnings for 2020, citing volume-based revenue growth driven by Trulicity and Taltz, among others, and improved productivity. The Indianapolis-based company expects 2020 non-GAAP EPS in the range of $6.70 to $6.80. The company anticipates 2020 revenue between $23.6 billion and $24.1 billion.

Meanwhile, Lilly lowered its full-year reported EPS guidance for 2019 to the range of $8.57 to $8.67 from the previous outlook of $8.59 to $8.69. Non-GAAP EPS forecast remains unchanged at between $5.75 and $5.85 for full year 2019.

* Lawmakers will nix three Affordable Care Act taxes as part of the year-end spending agreement and are setting aside measures to lower prescription drug prices and end surprise medical bills, giving the healthcare industry a major victory. Congress has until the end of the day Dec. 20 to adopt the spending package and get it to the White House or the federal government will shut down.

The bill includes a single measure to lower drug prices — the CREATES Act — but not industry-opposed provisions from a large package worked out Dec. 9 by the heads of the Senate Health, Education, Labor and Pensions Committee and the House Energy and Commerce Committee to reduce medicine costs and end surprise medical bills, according to details provided to S&P Global Market Intelligence by a senior House Democratic aide.

* Tokyo-based Takeda Pharmaceutical Co. Ltd. plans to release at least four cancer drugs in China in the next five years through an accelerated launch process, Phil Rowlands, head of the company's oncology unit told S&P Global Market Intelligence. These oncology therapies will be among a bucket of at least 15 drugs that Takeda plans to roll out in China, Rowlands said in an interview.

Rowlands said the four drugs will include blood cancer therapy Adcetris and lung cancer treatments Alunbrig and TAK-788. He did not name other drugs that may be included.

On the policy front

* The Trump administration extended the deadline for U.S. consumers to enroll in health plans offered under the Affordable Care Act after the marketplace's website experienced technical problems, resulting in some Americans being locked out. Enrollment for individual insurance coverage under the ACA offered by companies like Cigna Corp., Anthem Inc. and Oscar Insurance Corp., starting Jan. 1, 2020, was set to end Dec. 15. But the Centers for Medicare and Medicaid Services said it would extend that deadline to 3 a.m. ET on Dec. 18.

* Kentucky's Democratic Gov. Andy Beshear rescinded the state's Medicaid work requirements waiver Dec. 16. The policy was supported by former Republican Gov. Matt Bevin, but never took effect after a federal judge struck it down twice. The judge's decision is being appealed in the U.S. Court of Appeals for the District of Columbia Circuit, along with a decision that struck down work requirements in Arkansas. Beshear has asked the court to dismiss Kentucky from the lawsuit, according to a Dec. 16 statement.

M&A and capital markets

* Merck & Co. Inc. launched a cash tender offer to purchase all outstanding common shares of ArQule Inc. for $20 each. The buyout offer will expire at one minute past 11:59 p.m. ET on Jan. 15, 2020, unless extended.

Kenilworth, N.J.-based Merck announced the deal, valued at about $2.7 billion, earlier this month, with an aim to add ArQule's experimental cancer treatment ARQ 531 to its pipeline.

* Contract research company Charles River Laboratories International Inc. agreed to acquire biological services provider HemaCare Corp. for about $380 million in cash.

Drug and product pipeline

* The U.K. National Institute for Health and Care Excellence recommended Veltassa, Vifor Pharma AG's medicine for treating hyperkalemia, or elevated potassium levels in the blood, in adults. NICE's endorsement for Veltassa, or patiromer, is for adults with persistent hyperkalemia and stages 3b to 5 chronic kidney disease or heart failure. These patients should also have a potassium level of at least 6.0 millimoles per liter; not be taking a reninangiotensin-aldosterone system for regulating blood pressure; and are not on dialysis.

* Alnylam Pharmaceuticals Inc. said its experimental therapy lumasiran met a phase 3 trial's main goal of reducing the levels of urinary oxalate levels in patients with primary hyperoxaluria type 1, a disease in which crystals build up in the kidneys and urinary tract. Oxalate is a natural end product of metabolism and leaves the body through urine. High levels of oxalate could lead to the formation of kidney stones.

* The U.S. Food and Drug Administration approved Pfizer Inc. and Astellas Pharma Inc.'s Xtandi, also known as enzalutamide, to treat metastatic castration-sensitive prostate cancer, a type of the disease in which the cancer has spread beyond the prostate and still responds to therapy to lower testosterone levels.

* BeiGene Ltd.'s Brukinsa medicine failed to show it worked better than Johnson & Johnson and AbbVie Inc.'s Imbruvica in patients with Waldenström's macroglobulinemia — a rare type of non-Hodgkin lymphoma that begins in the white blood cells — whose cancer returned or did not respond to prior therapy, as well as patients who had not received any prior therapy for the disease, missing the main goal of the late-stage study dubbed Aspen.

* Gilead Sciences Inc. said cilofexor, firsocostat and selonsertib, in various combinations or alone, did not induce a response in patients with fibrosis, or scarring in the liver, due to nonalcoholic steatohepatitis, a progressive liver disease that can result in cirrhosis, liver failure, cancer and death — failing to reach the main goal of the phase 2 Atlas trial.

* BioMarin Pharmaceutical Inc.'s experimental treatment vosoritide met the main goal of a late-stage study after it increased the rate of height growth in children with achondroplasia, the most common form of disproportionate short stature.

Operational activity

* Bayer AG urged a U.S. federal appeals court to quash a verdict that ordered the company to pay $25 million to a man who alleged that his cancer was caused by the company's weedkiller Roundup, Reuters reported.

In March, a jury in San Francisco federal court ordered Bayer to pay $80 million to Edwin Hardeman, who claimed that he developed non-Hodgkin lymphoma after using Roundup — which the German pharma and chemicals giant inherited following the $62.5 billion acquisition of Monsanto Co. in 2018. The trial court judge in July reduced the amount to $25 million, Reuters reported.

* Bausch Health Companies Inc., formerly Valeant Pharmaceuticals, agreed to pay $1.21 billion to settle a class-action lawsuit filed in the U.S. District Court of New Jersey alleging that the company failed to warn investors amid a drastic drop in share price beginning in 2015. Shares of Valeant fell from more than $250 in 2015 to under $9 two years later after lawmakers questioned why the price of drugs acquired by the company had more than quadrupled.

* Members of the Sackler family who held stakes in Stamford, Conn.-based Purdue Pharma LP withdrew $10.7 billion from the OxyContin manufacturer during the period of 2008 to 2017, The New York Times reported, citing a new audit commissioned by the company.

* The U.S. Patent Office's Patent Trial and Appeal Board will review Johnson & Johnson's challenge of Intuitive Surgical Inc.'s patent on its surgical navigation guidance system.

* Eagle Pharmaceuticals Inc. said it settled a patent dispute involving Lilly's chemotherapy drug Alimta, allowing the launch of Pemfexy — Eagle's branded alternative therapy to Alimta — in 2022.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was up 1.22% to 27,843.71, and the Nikkei 225 rose 0.47% to 24,066.12.

In Europe, around midday, the FTSE 100 fell 0.21% to 7,503.42, and the Euronext 100 was down 0.38% to 1,141.94.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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